Tag Archives: Trader Joe’s

As grocery, supercenter and club stores have seen their average basket sizes slide over the last year, a distinctly different food retailer continues to see unparalleled success with a deliberately scaled-down strategy.  Trader Joe’s stores sell an estimated $1,750 in merchandise per square foot—more than double the performance of Whole Foods stores.

They operate on a very different scale, however.  Trader Joe’s sells approximately 4,000 SKUs— a far cry from the 50,000 kept by typical grocery retailers.

The key to making every SKU work hard is assuring exceptional quality.  According to Barry Schwartz, author of The Paradox of Choice,  offering high-quality products and fewer choices has a positive effect on sales.   Consumers are more likely to buy if they’re reassured they’re making a good choice, one they won’t regret later.  They accept fewer choices if they trust that those few items will be exceptionally good.

And consumers trust Trader Joe’s to offer the best products available.  The company invests heavily in procuring outstanding products and empowering their product developers (or top buyers) to set trends rather than follow them.  Read more...